https://clearaction.com/customer-centric-innovation/

customercentric innovationWhat defines a customer-centric organization, and why is taking a customer-centric approach increasingly seen as important? ClearAction’s Lynn Hunsaker and Patricia Seybold Group’s Matthew Lees discuss the business case for a customer-centric organization and customer-centric innovation.

Lynn Hunsaker. When the customer’s well-being comes first in your decision-making, you’re customer-centric. A customer-centric manager feels certain that all other interests will be well served as a by-product of putting the customer first. Round-the-clock two-way communications in a wide variety of forums have put customers in the driver’s seat as informed, sophisticated and powerful parties in purchase decisions. Fast-paced lives, reducing wait times, and services as share-of-wallet have also increased for consumers as well as business customers, heightening the impact of interactions with companies.

Matthew Lees. Through the advent of the internet, faster computers and fast connectivity, people have the ability to communicate with each other in a way that’s never happened before. The traditional walls of communication with customers are crumbling due to the speed and availability of information and information flow and so instead of the center of your universe being your products and expertise it’s about your services and your brand. Customer-centricity is about what your customers and prospective customers are looking to do.

Crowdsourcing offers a customer-centric approach for tapping into the collective experience, knowledge, creativity and skills of your customers. What approaches can companies take to help make crowdsourcing work for them?

LH. Anytime customers provide inputs, make sure you have a process in place to act on those inputs and to inform customers of your actions. A best practice for crowdsourcing is to inform customers in advance of your process and any limitations and disclaimers. Use the general rules
for effective brainstorming.

My recommendation for customer-centric innovation research is to focus primarily on the customer’s world, and secondarily on the company’s product, service or process. Thoroughly understand the bigger picture of how the customer is using your offering, and their related challenges, workarounds,
and any excesses or deficiencies, and you’ll find a great deal of inspiration for customer-centric innovation. By taking the responsibility to focus first on their world and connect it to yours, you may find it unnecessary to ask customers to enter your world so intimately and literally.

Many researchers have the mistaken idea that customers don’t know or can’t articulate what they want. They found that customers may not be qualified to make meaningful technical suggestions, or their actual behavior doesn’t match their reported intentions. In reality, customers do know their own world – it’s a mistake to expect them to know the company’s world. Customers may not be able to articulate a new solution, but they can show companies how and why they are getting something done, their related challenges, work-arounds, and any excesses or defciencies of current solutions. Crowdsourcing is a valuable brainstorming technique that should be used in conjunction with thorough research of
the customer’s world.

ML. There are crowdsourcing applications out there, and they’re getting good traction, and some of them are really terrific. But if you’re a marketing person or an R&D person and you’re looking to do some crowdsourcing, even among your employees, you could have the best crowdsourcing technology, and it’s not going to be effective if your organizational mindset
and culture isn’t willing to listen and take some action on what the crowd is saying.

With crowdsourcing you need to be much more transparent and implicitly suggest that you are going to take on board what the crowd is saying. There is an implicit agreement that you will take a consumers input seriously and that’s the first step – before technology even
enters into the picture. However, you don’t want to over-promise and let customers think that if they send you an idea, a week later it will turn into reality.

Who needs to take ownership of a company’s customer community initiative? Should this be a departmental or business unit project, or does it need more of a company-wide focus?

LH. Customer communities may have a wide or narrow scope, which could determine the appropriate owner within the company. A cross-functional discussion should take place before creating a community to determine the company’s strategy and roadmap. Creating a community also establishes expectations among customers, so be sure to carefully plan and to proactively manage expectations of all parties.

ML. It’s really about being approached in both of those ways by different organizations and there isn’t a clear delineation on which of those works better. It’s simply that doing something is better than doing nothing, partly because that helps to socialize this within the organization and start to learn about the business practices.

Any business depends on hiring great people, but customer-centricity is particularly dependent on employing and developing people that understand the importance of the business-consumer relationship.

How can companies ensure their organizational culture is geared towards customer-centricity?

LH. Engagement of employees and customers go hand-in-hand, but it’s not a chicken-and-egg issue. Always start with a clear identification of your target market and a thorough understanding of its world, and then determine the required competencies of employees to hire, and their intrinsic motivators. Nurture customer-centricity by keeping employees
continually aware of developments in the customer’s world, and by maintaining a customer-first mindset in all internal discussions, decisions and activities.

The vision and values that top management communicates, both verbally and behaviorally, set the tone and direction for the organization. The key is consistency – at every opportunity, management should continually communicate the necessity of making it easier and nicer for
customers to get and use solutions. Consistency occurs in formal and informal meetings, written correspondence, external messages and in every business process and every management ritual such as performance reviews, annual operating plans and performance dashboards.

Customer-centricity, as priority number one, must permeate the entire business, and be un-challenged by other concerns as the organization’s primary focus of attention and efforts.
Accountability determines the degree to which customer-centricity takes root. What gets rewarded gets done. Proper balance and wise management of rewards and penalties are extremely important. The best planned accountability programs are undermined if group members view them as inequitable or unfair, so close monitoring of group member’s perceptions is key.

ML. Customer-centricity is about getting employees, who previously never interacted directly with customers, to engage directly with them. And so, for the companies that are implementing crowdsourcing now and engaging with their customers, they are getting a head start and
they’re setting up the processes and learning what goes into it.

There are many companies that are setting up innovation centers and these almost separate groups are charged with thinking about how the entire organization can innovate. Again, whether it’s innovating products, services, business processes, internal processes, customer
facing processes, processes involving business partners, it’s a question of how they can innovate more quickly and be more flexible.

It’s a kind of centralized approach, and many of these groups are looking at crowdsourcing methodologies whether for customer-centric innovation or for opening up to customers and others outside of the organization as opposed to an R&D group.

Originally published by Business Management magazine as The Impact of Interaction.

Image licensed to ClearAction by Shutterstock.

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